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Technology Stocks : Webvan Group (WBVN) -- Ignore unavailable to you. Want to Upgrade?

To: CMon who wrote (187)	6/22/2000 4:35:00 PM
From: mmeggs	Read Replies (1) \| Respond to of 464

In the end it all depends on how far you see the execution going. What exactly constitutes success? One simple way of looking at it: At max capacity, each DC can supposedly do about $300 million in revs. 26 DC's planned initially over the next 2 1/2 years or so. $7.8 billion. (Notably a very very small fraction of the markets being addressed) Assume they can do 12% margins. (Currently much higher.) About a $1 billion or $3 EPS. What kind of multiple? I dunno. 15x? 20x? 10x? $45. $60. $30. In any case, way above where we're at here. You might think the current price is a fair discount for execution issues, (I don't) but I think it's a stretch for you to say all upside is in the stock. mmeggs

To: CMon who wrote (187)	6/22/2000 7:02:00 PM
From: Srexley	Respond to of 464

Good little debate starting here. I understand your point of view, and feel that there is good logic to your concerns. My feeling, which is very un-scientific (not tied to the fundamentals too closely), is that home delivery of groceries WILL succeed in the U.S. That said, I feel that WBVN is in the best position to succeed in this market. If both of my assumptions are correct, a $2.5 billion market cap is NOTHING. On the other hand, if either one is wrong, my entire investment will be worth NOTHING. My position is small, so I can't get hurt too badly. I like mmegs response to you also. It's much more scientific than mine.